The rollout of the protocol on Optimism has been approved by governance an important part of this launch will be kickstarting growth with OP incentives.
On behalf of POOL governance I submitted a proposal to Optimism governance to provide rollout incentives. This proposal was previously shared with PoolTogether governance in May. The high level details are below:
Amount Requested:
450,000 OP Tokens
Timeline for Distribution:
10 weeks (70 days)
Distribution Method
TWAB Rewards Contract (epoch length TBD)
Metrics:
10,000 unique depositors
$25 million in deposits
Ideally, we can rally the community around these metrics and goals to reach them and then activate a second round of incentives.
The primary purpose of this post is:
Communicate the plan and goals
See if anyone has alternative distribution ideas for the tokens that may drive growth??
This will be really great if we receive 450,000 tokens to incentivize growth!
I think it would be cool to do epoch lengths of TWAB rewards that incentivize savings. Perhaps one month? Is the timeline of 70 days a fixed period from Optimism? Perhaps a little longer could make sense as we grow the prize pool to the goal of $25 million in deposits.
We should advertise our high transaction volume as this was one of the deciding criteria for tier in Optimism Phase 0. Info on OP incentive program can be found here: Governance Fund Overview | Optimism Docs
Highlight:
“Matching:
Although not a strict requirement, the Optimism Foundation recommends that each project submitting a Governance Fund proposal include a commitment to match OP token incentives with their own project incentives (when the project has the capital and capacity to do so).”
We should think about if we can/want to match the incentives with POOL. I think it will be hard to match $300k worth of OP tokens 1:1 in dollar value with POOL, as that would be 8% of the total POOL in our treasury. Perhaps we could offer to match at a reduced rate. We’re kinda broke in dollar terms tho so we might qualify for “doesn’t have the capital to do so”
The Incentive Proposal Template also has more fields, which we should have a good answer to, such as Optimism alignment and How will this distribution incentivize the usage of Optimism?
The 70 days is not fixed and we could adjust it. My main idea was wanting to have a fairly aggressive distribution window so that we could then get another round of incentives.
I built out a model to support the growth. If we model OP at $0.75 per token and effective prize APR at 3% that means we would have an overall APR of 10% @ $25 million (and a higher APR at lower deposit amounts). I think that is a reasonable rate to attract that level of growth. Model is here: OP Incentive Design - Google Sheets
Thx for sharing with us and ofc full support for the OP Rollout and incentives!
Personally I would prefer if we could distribute the OP rewards as prizes instead of an APR drip via TWAB. I know, I’m probably alone with that opinion but I just like prizes more and think APR is boring.
Given that their matching request does not specify it needs to be in dollars, I’d say a reasonable matching structure would be either match in dollars proportional to MC ratio or match in tokens proportional to total (circulating) supply.
Aggressive may be good, but don’t forget that we tried aggressive on v4 launch and that the end result was (at least to me) kind of disappointing in terms of growth. You have better insight then me into potential other incentives and what we’d have to do for that, but I’d rather emphasize our ability to attract long-term depositors / savers than yet another quick-buck yield farmer.
Cool! Yeah, if possible I would really appreciate using some POOL Tokens as prizes.
It even doesn’t have to be just TWAB or just prizes, we could also do some this way and some this way.
The cool and exciting part about PT are the prizes and chance to win big, and having a small depositor winning a big amount of OP Tokens would be awesome!
Anyways, im kind of siding with Lonser and drcpu here. APR is good as a tasty headline feature to entice people to use the protocol, but ultimately isn’t the core of what the protocol is about? And eventually it just dries up anyway.
It might be better to do as Lonser says and have it as a pot of prize OP into the future. Maybe when there is some level of yield on OP itself that PT can tap into for its own prize pool.
Update for anyone here not on the call:
It’s unfortunately technically not easily doable to use OP and USDC as prizes.
So it seems currently the way to go is the TWAB rewards contract.
When you talk about matching OP dollar for dollar with POOL I think it’s important to remember we are heavily incentivizing deposits with USDC prizes.
There are a lot of moving parts, but we might say $3.3k per day USDC subsidy with the new prize distribution * 70 days = $231k. With 450k OP at $.527 = $237k.
I think we are doing our part to drive growth without being obligated to add the POOL token. If we add POOL we should reduce the USDC subsidy and POOL incentives should be equal on all chains while being accompanied with POOL liquidity.
Agree here. With the new prize distribution especially, there will be longer timelines between wins. Adding some constant APR between those timelines fits perfectly. The new prize distribution reduces the subsidy and that gap is filled by OP tokens and we can add some POOL in there too but I don’t think it’s necessary if the subsidy is still over 3k/day. However, further reduction in subsidy would provide more oppurtunity to introduce more constant apr in the POOL token and/or OP token to fill that void.
As @drcpu pointed out, an aggressive strategy was tried with V4 and growth was curtailed prior to, I believe, what we all expected. This is a good point, and while I defintely agree with @underthesea that our TWAB epochs should be spaced to incentivize saving instead of not delivering boat loads of free money early, I also think that V4 initally lacked something for depositors in between wins. I think before we go straight to a slow(er) delivery model, we attempt an aggressive(er) constant incentive model that people can “tangibly” hold when they’re not receiving prizes. It has become clear that many users aren’t okay with ending up at the correct apr, instead they want to ride the apr. Granted, this is not really the point of pooltogether, but I think giving them incentives (not prizes) in a spaced out TWAB epoch (to incentivize saving but also deliver constant something) is a great compromise. Thanks @Leighton for writing up the proposal.
Can we use all of the tokens to reward communities for locking in TVL for 12 months on OP with PT please?
10 weeks (70 days) We can distribute at the end of 12 months over the course of 10 weeks where we reward TVL, number of wallets delegated to, and how many wallets have deposited themselves.
Distribution Method
TWAB Rewards Contract (epoch length TBD)
Metrics:
10,000 unique depositors
$25 million in deposits
This strategy would definitely get us to these numbers!
Note: I’m biased because, I moved from polygon to optimism almost solely for op rewards. I missed the airdrop and was taking this as a opportunity to farm some op tokens. I assumed that this past week I was racking up twab time which was consolidation since my daily odds are 1:353. Even so I would completely understand if we would rather spread the token distribution out another week.
Op tokens are expected to be received Monday. The current plan is to distribute these tokens via twab starting then. Do we want to continue with this plan or is it better to reward the roughly ~2m we have in optimism deposits for the time they’ve already spent deposited? Personally I think we should reward deposits since launch. The distribution timeline is 10 weeks. If we went ahead and rewarded past deposits we would have ~9 weeks remaining and could possibly get a second round of rewards sooner.
Count optimism deposits towards op rewards starting when the op tokens are received.
Count deposits starting at optimism launch towards op rewards.
Hey @Adminaiden - I voted for the 1st option just because it feels like this would be the most “fair” approach in my mind since there are still so many people new to Optimism, or in progress of migrating to the rollup…
I can also see why it would make sense to reward loyal users though as well…more so thinking along the lines of what might be better to incentivize further growth which leads me to option 1.
Would love to see a targeted incentive aimed at early depositors for the OP network. Probably going to lose this battle, BUT…the same psychological precedent could be set here as is set with an airdrop…in anticipation of rewards, TVL will grow. While that is clearly not the case with the current state of affairs (as is evident by the majority of TVL on polygon where chances for prizes are far greater than OP), it COULD be the case of we reward early users NOW, then watch the early growth in the next chain deployments (arbitrum, zksync, etc.)
I think it’s important to have early adopters willing to participate without the added incentives. Rewarding them with incentives from that chain makes sense.
When the incentives roll out, the majority of PT TVL is going to be on OP. That number is not going to change if a small portion of those rewards went to early participators. There’s no reason not reward both early adopters and those who come over later.
How do we actually distribute those tokens to people? I like the idea… we also would likely want to set the snapshot date for BEFORE Layer3 ran the promotion because a thousand or so mostly botish accounts… or we could include them but just do a very small amount (i.e. before X date it’s this, after Y date it’s this.
Unfortunately it looks like the multi-sender app does not support Optimism: https://multisender.app/ otherwise we could use something like that.
@daboom do you want to try and work on pulling a list of addresses you think should be included?
